Multiplexes unfazed by Mukesh Ambani’s ‘Jio First Day First Show’ bet

Reliance Industries chairman Mukesh Ambani’s announcement of ‘Jio First Day First Show’ has not gone down too well with the multiplex industry.

The service makes new movies available to homes of premium customers of Jio GigaFiber broadband services on the release day itself. “For the first time in India, we are introducing a disruptive concept for watching new movies,” Ambani said in his address to shareholders at the 42th annual general meeting of the company. The commercial launch of Jio GigaFiber will begin on September 5 and that of Jio First Day First Show in mid-2020.

The multiplex industry sees this as an attack on its bread and butter: The lion’s share of revenues of multiplexes come from box office ticket sales. Food and beverages, and ads make up the rest.

PVR Cinemas, India’s largest multiplex network with 764 screens, said that for decades release windows have been a valuable model for exhibitors and producers. “In India and globally, producers have respected the release windows and kept a sacrosanct gap between the theatrical release date and the date of release on all other platforms, i.e. DVD, DTH, TV, OTT, etc. Theatrical and at-home are two completely different experiences and each has their own places. Both these experiences have co-existed and prospered for decades and will continue to do so in future,” PVR said.

“Given India’s low screen density and the growth potential it offers, we expect cinema exhibition to continue expanding its footprint in India for the next multiple years, which will continue growing its contribution to the overall revenue of the filmed entertainment.”

PVR says that cinemas have an “unreplaceable element” which is why it continues to deliver a robust box office performance not just in growing market such as India but also in the more matured markets such as the U.S., China, Europe, etc. where cinemas have regularly competed with similar initiatives such as Netflix Original Movies.

INOX Leisure, too, said that producers, distributors, and multiplex owners in India have mutually agreed to a window of eight weeks between the release of a movie in cinemas and the release on any other platform.

“This exclusive theatrical window is a model that is followed internationally, in order to ensure the robust financial viability of all the segments of the sector, and has been replicated in India. We strongly believe that Indian movie watchers’ love for cinema on giant screens is deep rooted and unshakeable, and this has kept and will continue to keep the industry alive and thriving for the past several decades, and for several decades to come,” INOX Leisure said in a statement.

The producer of the film is the owner of the creative content and is therefore entitled to choose the platform for distribution and consumption of his content, INOL adds.

“However, in view of this mutually agreed exclusive theatrical window, he would have to choose between theatrical exhibition or release on any other platform, since release on both simultaneously would breach the mutually agreed exclusive theatrical window,” it says.

Media and entertainment analysts, however, feel that it might not be such a bad move for the industry. “Jio has also announced plans to offer movies on a first-day-first-show basis; this we believe won’t have a big negative impact for multiplexes as the release of a movie in cinemas is very important in order to get deals on digital and satellite. Further, there are about 400 films released every year across genres and hence the release of a few films directly on Jio won’t impact footfall,” Karan Taurani, vice president- research analyst (media), Elara Capital said.

Taurani adds that cinema going is considered a family outing in India. “We don’t see large budget films going for a direct release on Jio. It will be limited to smaller films going directly on digital, as the economics of a big film don’t work for the same. Overall, we believe execution of the FTH (fiber to home) launch remains to be a key factor for its success,” he said.

He believes Jio GigaFiber won’t match Jio’s mobile network in customer acquisition when the latter launched in 2016, as FTH services continue to face last minute challenges such as LCO support and customer willingness to switch. “However, there will be a slow and steady movement towards Jio FTH based on customer service and feedbacks,” Taurani adds.